ex10-5.htm


    
      
        

      



     

     

    
      EMPLOYMENT
AGREEMENT

      


      This
Employment Agreement ("Agreement"), is entered into by and between Dais Analytic
Corporation, located at 11552 Prosperous Drive, Odessa, Florida 33556
("Employer") and William J. Newman, currently residing at 18 Blackburn Road,
Basking Ridge, New Jersey 07920 ("Employee"), to be effective on or before March
31, 2008 (the "Effective Date").

      


       

      W I T N E
S S E T H:

       

       WHEREAS, Employer is desirous of employing
Employee pursuant to the terms and conditions and for the consideration set
forth in this Agreement, and Employee is desirous of entering the employ of
Employer pursuant to such terms and conditions and for such
consideration.

       

       NOW, THEREFORE, for and in consideration of the
mutual promises, covenants, and obligations contained herein, Employer and
Employee agree as follows:

       

      ARTICLE
1: EMPLOYMENT AND DUTIES:

       

      
        	
                1.1.

              	
                Employer
      agrees to employ Employee, and Employee agrees to be employed by Employer
      on the terms and conditions set forth in this
  Agreement.

              


      

       

      
        	
                1.2

              	
                Subject
      to the provisions for termination and extension as hereafter provided, the
      term  (“Term” shall include any extension of the term of this
      Agreement as provided in section 1.3 below) of this Agreement shall
      commence on the Effective Date and shall continue until the first
      anniversary hereof (“Term”).

              


      

       

      
        	
                1.3

              	
                The
      Term of this Agreement shall be automatically extended on the first
      anniversary of the Effective Date for one (1) year and on each subsequent
      anniversary of the Effective Date for an additional one year period,
      unless, in any such case, Employer delivers, at least one (1) month prior
      to such anniversary of the Effective Date, written notice of its intent
      not to renew or extend the Term.

              


      

       

      
        	
                1.4

              	
                Beginning
      as of the Effective Date, Employee shall be employed as Chief Operating
      Officer of Employer. Employee shall report to the President and Chief
      Executive Officer of the Employer. Employee agrees to serve in said
      position or in such capacities as may be requested by the Employer
      consistent with duties, responsibilities, etc. consistent with this title
      within the industry at a similar size, and to perform diligently and to
      the best of  Employee's abilities the duties
      and  services.

              


      

      


      
        	
                1.5.

              	
                Employee
      shall at all times comply with and be subject to such policies and
      procedures as Employer may establish from time to time, for members of the
      Company whether at the executive level or for members of the entire
      Company, including without limitation any Code of Business Conduct (the
      "Code of Business Conduct") the Employer has or may establish from time to
      time.

              


      

      


      
        	
                1.6.

              	
                Employee
      shall, during the period of Employee’s employment by Employer, devote
      Employee's full business time, energy, and best efforts to the business
      and affairs of Employer. Employee may not engage, directly or indirectly,
      in any other business, investment, or activity that interferes with
      Employee’s performance
      of Employee’s duties hereunder, is contrary to the interest of Employer.
      The foregoing notwithstanding,
      the parties recognize and agree that Employee may engage in passive
      personal investments and other business activities which do not conflict
      with the Business and affairs of the Employer or Employer Entities or
      interfere with Employee's performance of his duties
      hereunder.  Employee may not serve on the board of directors of
      any entity other than an Employer Entity during the Term without
      Employer’s written approval thereof.

              


      

      


      
        
          
             


          

          
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                1.7

              	
                Employee
      acknowledges and agrees that Employee owes a fiduciary duty of loyalty,
      fidelity and allegiance to act at all times in the best interests of the
      Employer and all other Employer Entities and to do no act which would,
      directly or indirectly, injure any such entity's business, interests, or
      reputation.  It is agreed that any direct or indirect interest
      in, connection with, or benefit from any outside activities, particularly
      commercial activities, which interest might in any way adversely affect
      Employer or any Employer Entity involves a possible conflict of
      interest.  In keeping with Employee's fiduciary duties to
      Employer, Employee agrees that Employee shall not knowingly become
      involved in a conflict of interest with Employer or the Employer Entities,
      or upon discovery thereof, allow such a conflict to continue. Moreover,
      Employee shall not engage in any activity which might involve a possible
      conflict of interest without first obtaining written approval of
      Employer.

              


      

       

      
        	
                1.8

              	
                The
      parties understand and agree that Employee will be employed during the
      Term of this Agreement at Employer’s principal offices which are currently
      located in Odessa, Florida. However, to the extent business needs do not
      require his physical presence at Employer’s principal office he will work
      from a suitable location which both  parties will agree to on
      its suitability prior to use. This notwithstanding the Employee agrees
      approximately 50% or more of his time will be spent at the principal
      office. At the end of three (3) years – if not earlier if agreed to by
      both parties – the parties will review Employee’s location as the goal is
      to have the executive team located at the Employer’s principal place of
      business.

              


      

       

      
        	
                1.9.

              	
                Nothing
      contained  herein  shall be construed  to
      preclude  the transfer of Employee's employment to another
      Employer Entity ("Subsequent Employer") as of, or at any time after, the
      Effective Date and no such transfer shall be deemed to be a termination of
      employment for the purposes of Article 3 hereof;  provided,
      however, that, effective with such transfer, all of Employer's
      obligations  hereunder shall be assumed  by and
      be  binding upon, and all of Employer's  rights
      hereunder shall be assigned to, such Subsequent Employer and the defined
      term "Employer" as used herein shall thereafter be deemed amended to mean
      such Subsequent Employer. Except as otherwise provided above, all of the
      terms and conditions of this Agreement, including without limitation,
      Employee's rights and obligations, shall remain in full force and effect
      following such transfer of
employment.

              


      

       

      ARTICLE 2: COMPENSATION AND
BENEFITS:

      


      
        	
                2.1

              	
                Subject
      to the terms and conditions of this Agreement, Employee’s base salary
      during the Term shall be One Hundred and Fifty Thousand Dollars ($150,000)
      per annum which shall be paid in accordance with Employer's standard
      payroll practice.  Employee's base salary may be adjusted from
      time to time at the sole discretion and approval of the majority of the
      Board of Directors (“Board”). Compensation payable under this section will
      be reviewed in September of 2008. Any changes to the Compensation to be
      paid pursuant to this section or any other provision of this Agreement
      shall be made in the sole discretion of
  Employer.

              


      

      


      
        	
                2.2

              	
                In
      addition to Employee’s base salary and benefits and subject to the terms
      and conditions of this agreement, Employee shall be paid a commission for
      each sale of a Employer commercial energy recovery ventilator system
      (“ERV”) or Employer commercial energy recovery ventilator system core
      “(Core”) to a third party made by the Company’s independent representative
      sales organization on behalf of
      Employer. Said commission shall be equal to two percent  (2%) of
      Employer’s Net Sales Price relating to such sale; provided, however, such
      commission shall be due only if: (1) the Gross Margin Percentage for the
      sale equals or exceeds Thirty- Five Percent (35%), and (2) Employer has
      received full payment of the Sales Price relating to the sale.
      Notwithstanding the foregoing, if an ERV contains a Core only the ERV
      shall be eligible for commission (i.e. a Core contained in an ERV is not
      subject to commission). Any commissions due and owing to Employee by
      reason of this section shall paid to Employee pursuant to Employer’s
      scheduled payroll in the month following Employer’s fiscal quarter in
      which the qualifying sale subject to commission was made and shall be
      subject to the terms and conditions of this Agreement. Such payment shall
      be subject to applicable tax and withholding. For the purpose of Section
      2.2, the following terms shall have the meanings provided
      below:

              


      

       

      


      
        
          
             


          

          
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                a.

              	
                “Gross
      Margin” shall mean Net Sales Price less the sum of the Cost of Goods Sold
      and Selling Expenses.

              


      

      


      
        	
                 
      

              	
                b.

              	
                "Cost
      of Goods Sold" shall mean the aggregate cost of the ERV or Core sold,
      prepared in accordance with GAAP consistent with Seller's practices.
      Without limiting the generality of the foregoing, "Cost of Goods Sold"
      shall include but not be limited to the following: raw material costs,
      direct labor costs (including payroll taxes and benefits), manufacturing
      overhead (including a reasonable portion of the factory space allocated to
      production, any outside buying services or commissions due to the same,
      reasonable product development and equipment depreciation costs, product
      freight, brokerage fees and,
duties.

              


      

      


      
        	
                 
      

              	
                c.

              	
                "Net
      Sales Price" shall mean the sales price of the ERV or Core, as applicable,
      subject to commission hereunder as prepared in accordance with GAAP
      and consistent with Seller's past practices, less (I) returns (including
      freight or handling incurred thereon), discounts, refund credits and
      allowances made or allowed to customers and (ii) sales and excise taxes
      actually paid.

              


      

      


      
        	
                 
      

              	
                d.

              	
                "Selling
      Expenses" shall mean the selling and advertising expenses of Employer
      relating to said Core and ERV including, but not limited to salespersons
      loaded salaries (including sales commissions), directly related
      promotional costs, freight out, advertising (local, co-op, etc.), photos,
      promotion, booth rental and related show expenses (if applicable),
      directly related travel expenses, entertainment expenses, and reasonable
      directly related travel expenses.

              


      

      


      
        	
                 
      

              	
                e.

              	
                “Gross
      Margin Percentage” shall mean the percentage derived by dividing the Gross
      Margin of the sale subject to commission by the Net Sales Price of that
      sale.

              


      

      


      
        	
                 
      

              	
                f.

              	
                "Sales
      Price" shall mean the full invoiced price, including shipping, handling
      and taxes, of the ERV or Core less returns, discounts, refunds, credits
      and allowances made or allowed to
customers.

              


      

       

      
        	
              	
                g.

              	
                “Commercial”
      shall mean a non-residential use of the referenced product in a
      building-related heating ventilation or air-conditioning application
      requiring at least One Thousand (1,000) cubic feet per minute of air such
      application.

              




      
        	
                2.3

              	
                Employer
      shall grant to Employee, pursuant to the Dais Analytic Corporation 2000
      Incentive Compensation Plan (the "2000 Plan"), a stock option to purchase
      up to Eight Hundred Thousand (800,000) Shares of Employer's $.01 par value
      common stock. Said option shall vest ratably over a three year period with
      Sixty Thousand Six Hundred and Sixty Six (66,666) shares vesting on the
      anniversary of third (3rd)
      month following the date of the option grant and every three (3) months
      thereafter until the entire sum is vested; provided, Employee is employed
      hereunder as of the date of such vesting. Each share subject to the option
      shall have an exercise price equal to the fair market value of Employer's
      common stock on the date of the option grant as determined in the sole
      discretion of the Board of  Directors,
      or if such authority has been delegated to the Compensation Committee, the
      Compensation Committee. All other terms and conditions said option grant
      are set forth in Exhibit A attached hereto, which forms a part of this
      Agreement.

              


      

       

      


      
        
          
             


          

          
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                2.4

              	
                Subject
      to the terms and conditions of this Agreement, if during the course of
      Employee’s employment hereunder, Employer receives net cash proceeds of
      One Million Dollars ($1,000,000) or more from the private or public sale
      of its $.01 par value common stock, with said stock being sold at no less
      than Twenty Five ($.25) per share (or in later rounds at a price per share
      which does not trigger anti-dilution or other related dilutive actions)
      and said sale being both initiated after the commencement of Employee’s
      employment and closed upon during the 2008 calendar year, Employee shall
      receive a cash bonus of Fifty Thousand Dollars ($50,000) payable in four
      equal monthly payments of Twelve Thousand Five Hundred Dollars $12,500)
      each. Said payments, if any, shall be commence on the month following the
      close of said sale and shall be paid with Employer’s scheduled monthly
      payroll. Any such payment hereunder shall be subject to all applicable tax
      and withholding requirements. Notwithstanding the foregoing, no payment
      shall be due or payable by reason of this section if condition of said
      sale precludes such a payment to
Employee.

              


      

       

      
        	
                2.5

              	
                Employee
      shall be entitled to three (3) weeks of paid vacation per year of
      employment. Said time shall accrue ratably over the year and any unused
      vacation time from one year may be carried to the next year of employment,
      if any, upon Employer’s written consent with said consent being require
      for each such request.  Employee shall be paid for fifty percent
      (50%) of any unused vacation at The time of termination if the said
      termination was not made for Cause. If said termination was made for Cause
      no payment for any unused vacation will be
made.

              


      

      


      
        	
                2.6

              	
                Subject
      to the terms and conditions of this Agreement, beginning on the Effective
      Date and continuing for the remainder  of the Term, Employee
      shall participate in any incentive plan instituted and approved by the
      Board of Directors of Employer provided, however, that all determinations
      relating to Employee’s participation, including, without limitation, those
      related to the performance goals applicable to Employee and Employee’s
      level of participation and payout opportunity, shall be made by a majority
      vote of the Company’s Board of
Directors.

              


      

       

      
        	
                2.7

              	
                During
      the Term, Employer shall reimburse Employee for all actual, reasonable and
      customary expenses incurred by Employee in the course of this employment
      provided that such expenses are incurred and accounted for in accordance
      with Employer's applicable policies and customary
    practices.

              


      

       

      
        	
                2.8

              	
                While
      employed by Employer, Employee shall be allowed to participate, on the
      same basis generally as other employees of Employer, in all general
      employee benefit plans and programs, including improvements or
      modifications of the same, which may exist as of the Effective Date or
      thereafter and which are made available by Employer to all or
      substantially all of Employer’s employees. Such benefits, plans, and
      programs may include, without limitation, any health, and dental insurance
      or 401K programs, if and when instituted. Any benefit plan currently
      existing or instituted by Employer after the Effective Date may be
      altered, change or discontinued by Employer at its sole discretion and at
      any time without obligation of any nature to Employee.  Except
      as specifically provided herein, nothing in this Agreement is to be
      construed or interpreted to increase or alter in any way the rights,
      participation, coverage, or benefits under such benefit plans or programs
      to other than those provided to other employees pursuant to the terms and
      conditions of such benefit plans and programs. While employed by Employer,
      Employee shall be eligible to receive awards under and subject to the
      terms and conditions of the 2000 Plan or any successor plan adopted by
      Employer; provided, however, that the foregoing shall not be construed as
      a guarantee with respect to the type, amount or frequency of such awards,
      if any, such decisions being solely within the discretion of discretion of
      the person or committee to whom such authority has been granted pursuant
      to such plan's terms. Employer shall reimburse
      Employee up to $1,800 for the cost of the Employee’s continuation coverage
      (“COBRA”) elected by Employee as a result of the termination of Employee’s
      most recent prior
employment.

              


      

       

      


      
        
          
             


          

          
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                2.9

              	
                Employer
      shall not, by reason of this Article 2, be obligated to institute,
      maintain, or refrain from changing, amending or discontinuing, any
      incentive compensation, employee benefit or stock or stock option program
      or plan.

              


      

       

      
        	
                2.10

              	
                
                  Employer
      may withhold from any compensation, benefits, or amounts payable under
      this Agreement
      all federal, state, city, or other tax as may be required pursuant to any
      law or governmental regulation or ruling, any required withholdings and
      any sums related to Employee portion of health care or other
      benefits.

                

              


         

      

      
      

      


      ARTICLE 3: TERMINATION OF EMPLOYMENT
AND EFFECTS OF SUCH TERMINATION:

       

       

      
        	
                3.1

              	
                Employee's
      employment with Employer shall be
terminated:

              


      

       

      
        
          	
                  (i)

                	
                  Upon
      the death of Employee,

                
	 
      	 
      
	
                  (ii)

                	
                  Upon
      Employee's Retirement (as defined below)

                
	 
      	 
      
	
                  (iii)

                	
                  Upon
      Employee's Permanent Disability (as defined below)

                
	 
      	 
      
	
                  (iv)

                	
                  At
      any time by Employer upon notice to Employee, or by Employee upon thirty
      (30) days notice to Employer, for any or no reason or

                
	 
      	 
      
	
                  (v)

                	
                  Upon
      expiration of the Term of this
Agreement.

                


        

      

       

       

      
        	
                3.2

              	
                If
      Employee's employment is terminated by reason of any of the following
      circumstances, Employee shall not be entitled to receive the benefits
      set forth in Section 3.3 hereof:

              


      

       

      
        
          	
                  (i)

                	
                   Death.

                
	 
      	 
      
	
                  (ii)

                	
                  Retirement.  "Retirement"
      shall mean either (a) Employee's voluntary retirement from Employment
      pursuant to a bona fide retirement plan maintained by Employer at or after
      normal retirement age (either voluntarily or pursuant to any Employer
      policy) or 

                
	 
      	 
      
	 
      	 
      
	 
      	
                  (b)
      The voluntary termination of Employee's employment by Employee in
      accordance with Employer's early retirement policy or offer or for other
      than Good Reason (as defined below).

                
	 
      	 
      
	
                  (iii)

                	
                  Permanent
      Disability. "Permanent Disability" shall mean Employee's physical or
      mental illness, injury or condition that renders Employee incapable of
      performing his usual duties with such condition likely to remain
      continuous for a period of three months as determined, in its sole
      discretion, by the Board of Directors.

                
	 
      	 
      
	 
      	 
      
	
                  (iv)

                	
                  Voluntary
      Termination. "Voluntary Termination" shall mean a termination of
      employment at the election of Employee for other than Good Reason. "Good
      Reason" shall mean a termination of employment by Employee because of
      a material breach by Employer of any material provision of this Agreement
      that which remains uncorrected for thirty (30) days following written
      notice of such breach by Employee to   Employer provided such
      termination occurs within fifteen (15) days after the expiration of the
      notice period.  

                
	 
      	 
      
	 
      	 
      


        

      

       

      
      

       

      
      

      
      

       

      
      

       

      
        
          
             


          

          
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                  (v)

                	
                  Termination
      of Employee's employment by Employer for Cause. "Cause" shall mean any of
      the following: (a) Employee's willful misconduct, dishonesty or reckless
      disregard of his responsibilities to Employer or in the performance of the
      duties and services required of Employee pursuant to this Agreement, and
      Employee has not cured such conduct within fifteen (15) days of written
      notice of his default, (b) the Employee is convicted or pleads nolo contendre or the
      equivalent to either a felony or misdemeanor involving moral turpitude,
      (c) a material violation of the Code of Business Conduct (if the Employer
      has in place such a plan), and Employee has not cured his default within
      fifteen (15) days of written notice of his default or (d) Employee's
      breach of any material provision of this Agreement which remains
      uncorrected for fifteen (15) days following notice of such breach to
      Employee by Employer, or (e) Employer’s failure to follow reasonable,
      lawful order or directions of the Chief  Executive Officer or
      the Bo

                
	 
      	 
      
	 
      	
                   Determination
      as to whether or not Cause exists for termination of the Employee’s
      employment will be made by a majority vote of the Board of
      Directors.

                
	 
      	 
      
	
                  (vi)

                	
                  Expiration
      of Term.

                
	 
      	 
      
	 
      	
                  Upon
      the occurrence of any of the events described in (i) through (vi) of
      Section 3.2, Employee's employment shall terminate and the Employer shall
      have no further obligation to Employee hereunder except to pay to Employee
      (or his estate, as the case may be), upon the latter of ten (10) days
      following the date of termination or upon the date of Employer’s next
      scheduled payroll, any accrued but unpaid Base Salary, and earned
      commissions calculated to date of termination plus any of un-reimbursed
      expenses payable to Employee pursuant to the terms and conditions of this
      agreement. All future compensation to which Employee would otherwise have
      been entitled and all future benefits for which the Employee was eligible
      shall cease and terminate as of the date of
termination.

                
	 
      	 
      
	 
      	
                  Any
      and all payments made To Employee ( or his estate, as the case may
      be)pursuant to this Section 3.2 shall be made after deduction of any
      non-reimbursable amounts paid by Employer on behalf of Employee and after
      all standard and customary withholding including but not limited to
      withholding for tax and social security
  purposes.

                


        

      

      
      

       

      
      

      
      

       

      
        	
                3.3

              	
                If
      Employee's employment is terminated by Employee for Good Reason or by
      Employer for any reason other than as set forth in Section 3.2 above,
      Employee shall be entitled to the following, as applicable:

                 

                (i) Subject to the
      provisions of Section 3.4, Employer shall pay to Employee a severance
      benefit consisting of eight (8) equal monthly cash payments which in the
      aggregate equal two thirds (66%) of Employee's base annual salary in
      effect at the date of Employee's termination of employment. Such
      severance benefit shall be paid commencing with the first payroll period
      of Employer following Employee's termination date. Notwithstanding the
      foregoing, if the Employee is terminated by Employer for failure to
      adequately perform the duties of his position as determined by the
      majority vote of the Board of Directors, then Subject to the provisions of
      Section 3.4, Employer shall pay to Employee a severance benefit consisting
      of three (3) monthly cash payments equal in the aggregate to Twenty five
      percent (25%) of Employee’s base annual salary in effect at the date of
      Employee’s termination of employment. Payment of such severance shall be
      made pursuant to the same procedure as described in this section (ii)
      above.

                 

                (ii) In the event Employee’s
      employment is terminated by Employer as a direct result of merger or the
      sale by Employer of all or substantially all of its assets the vesting of
      the options grant made under Section 2.4 shall be modified by the Board of
      Directors or, if appropriate, Compensation Committee so as to cause all
      shares subject to said grant to vest as of the date of any such merger or
      acquisition or any such date prior thereto as said Board of Directors
      shall determine in its sole
discretion.

              


      

       

      
        
          
          

        

        
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                3.4

              	 Payments made under this Agreement as well as any severance
      benefit paid to Employee pursuant to Section 3.3 shall be in consideration
      of Employee's continuing obligations hereunder (including those after
      termination), including, without limitation, Employee's obligations under
      Article 4. Further, as a condition to the receipt of such severance
      benefit, Employer, in its sole discretion, may require Employee to first
      execute a release, in the form established by Employer, releasing Employer
      and all of its affiliates, and their officers, directors, employees, and
      agents, from any and all claims and from any and all causes of action of
      any kind or character, including, but not limited to, all claims and
      causes of action arising out of Employee's  employment with
      Employer and any of its affiliates or the termination of such employment.
      The performance of Employer's obligations under Section 3.3 and the
      receipt of the severance benefit provided thereunder by Employee shall
      constitute full settlement of all such claims and causes of
      action.  Employee's rights under Section 3.3 are Employee's sole
      and exclusive rights against the Employer or its affiliates and the
      Employer's sole and exclusive liability to Employee under this Agreement,
      in contract, tort or otherwise, for the termination of his employment
      relationship with Employer. Employee agrees that all disputes relating to
      Employee’s termination of employment, including, without limitation, any
      dispute as to "Cause" or "Voluntary Termination" and any claims or demands
      against Employer based upon Employee's employment for any monies other
      than those specified in Section 3.3, shall be resolved through arbitration
      as provided in Section 6.6 hereof; provided, however, that decisions
      specifically reserved herein for either the Board of Directors or the
      Compensation Committee, including but not limited to those such as to
      whether "Cause" exists for termination of the employment relationship with
      Employee and whether and as of what date Employee has become permanently
      disabled are delegated solely to the Board of Directors of Employer or the
      Compensation Committee (as the case may be), for determination and any
      dispute of Employee with any such decision shall be limited to whether the
      Board of Director or Compensation Committee as the case may be reached
      such decision in good faith. Nothing contained in this Article 3 shall be
      construed to be a waiver by Employee of any benefits accrued for or due
      Employee under any employee benefit plan (as such term is defined in the
      Employees' Retirement Income Security Act of 1974, as amended) maintained
      by Employer. 


      

       

      
        	
                3.5

              	
                Termination
      of the employment relationship does not terminate those obligations
      imposed by this Agreement which are continuing obligations, including,
      without limitation, Employee’s obligations under Article 4.  All
      such obligations shall survive termination of this
    Agreement.

              


      

       

       

      ARTICLE
4: OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY AND
CONFIDENTIALINFORMATION:

       

      
        	
                4.1

              	
                Any and all intellectual property rights, title
      and interest in works, including but not limited to all information,
      ideas, concepts, improvements, discoveries, and inventions, whether
      patentable or not, which are conceived, made, developed or acquired by
      Employee, individually or in conjunction with others, during Employee's
      employment with Employer or any of its affiliates (whether during business
      hours or otherwise, whether on Employer’s premises or otherwise and
      whether with or without use of Employer’s facilities, materials,
      processes, equipment or supplies) which relate to the actual or intended
      business, products or services of Employer or its affiliates (including,
      without limitation, all such information relating to corporate
      opportunities, research, products, financial and sales data, pricing and
      trading terms, evaluations, opinions, interpretations, acquisition
      prospects, the identity of customers or their requirements, the identity
      of key contacts within the customer's organizations or within the
      organization of acquisition prospects, or marketing and merchandising
      techniques, prospective names, and marks), and all writings or materials
      of any type embodying any of such items, shall vest exclusively in and be
      the sole and exclusive property of Employer or its affiliates, as the case
      may be. Employee will promptly disclose to Employer, any such intellectual
      property rights, title and interest in works and any such intellectual
      property rights, title and interest in works made in whole or in part by
      Employee within one year following the termination of his employment shall
      be deemed to fall within the provisions of this Agreement unless proven by
      Employee to have been first conceived and made following such
      termination.

              


      

       

      
        
          
             


          

          
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                4.2

              	
                Employee
      acknowledges that the businesses of Employer and its affiliates are highly
      competitive and that their strategies, methods, books, records, and
      documents, their technical information concerning their products,
      materials, equipment, research and development, services, and processes,
      procurement procedures and pricing techniques, the names of and other
      information (such as credit and financial data) concerning their customers
      and business affiliates, all comprise confidential business information
      and trade secrets which are valuable, special, and unique assets which
      Employer or its affiliates use in their business to obtain a competitive
      advantage over their competitors. Employee further acknowledges that
      protection of such confidential business information and trade secrets
      against unauthorized disclosure and use is of critical importance to
      Employer and its affiliates in maintaining their competitive position.
      Employee hereby agrees that, except as required in connection with the
      performance of his duties under this Agreement, Employee shall keep
      confidential and shall not, at any time during or after his employment by
      Employer, directly or indirectly, disclose any confidential business
      information or trade secrets of Employer or its affiliates (other than to
      Employer’s other employees and/or agents in connection with such party’s
      performance of its obligation to Employer), or make any use thereof,
      except in the carrying out of his employment responsibilities hereunder.
      Confidential business information shall not include information in the
      public domain (but only if at the time of the disclosure such information
      was in the public domain and the same became a part of the public domain
      through a means other than a disclosure prohibited hereunder). The above
      notwithstanding, a disclosure shall not be unauthorized if (I) it is
      required to be disclosed by law or a court of competent jurisdiction
      provided, however, that Employee shall, to the extent practicable and
      lawful in any such events, give prior notice to Employer of his intent to
      disclose any such confidential business information in such context so as
      to allow Employer or its affiliates an opportunity (which Employee will
      not oppose) to obtain such protective Orders or similar relief with
      respect thereto as may be deemed
appropriate.

              


      

       

      
        	
                4.3

              	
                All
      tangible materials including but not limited to written materials,
      listing, notes, data, sketches, drawings, memorandums, models, reference
      materialism accounts, records, and other documents made by, or coming into
      the possession of, Employee during the period of Employee's employment by
      Employer which relate in any way to or contain or disclose confidential
      business information or trade secrets of Employer or its affiliates shall
      be and remain the property of Employer, or its affiliates, as the case may
      be. Upon termination of Employee's employment by Employer, for any reason,
      Employee promptly shall deliver the same, and all copies thereof, to
      Employer.

              


      

       

      
        	
                4.4

              	
                For
      purposes of this Article 4, "affiliates" shall mean entities in which
      Employer has a direct or indirect equity
  interest.

              


      

       

      
        	
                4.5

              	
                Employee shall not use or disclose to anyone
      affiliated in any manner with Employer or Employer Entities,
      at any time any confidential information secured from any source,
      including but not limited to any former employer of Employee, to whom he
      has a duty of confidentiality with respect to said
      information.  Employee represents and covenants that to the best
      of his knowledge, he is under no such obligation at this
      time.

              


      

      
 

      
        
          
          

        

        
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                4.6

              	
                Employee
      will execute any documents reasonably necessary to transfer the
      intellectual property described in Section 4 to Employer, including but
      not limited to, all patent applications and any continuations in part,
      reexaminations, reissues or foreign counterparts thereof. In the event
      Employer is unable, after reasonable effort, the secure Employee’s
      signature on any documents, letters patent, copyright or other analogous
      protection relating to an Invention, whether because of Employee’s
      physical or mental incapacity or for any other reason whatsoever, Employee
      hereby irrevocably designates and appoints  Employer and its
      duly authorized officers and agents as Employee’s agent and
      attorney-in-fact, to act for and in Employee’s behalf and stead to execute
      and file any such application or applications and to do all other lawfully
      permitted acts to further the prosecution and issuance of letters patent,
      copyright or other analogous protection thereon with the same legal force
      and effect as is executed by Employee. Employee’s obligation to assist
      Employer in obtaining and enforcing patents and copyrights for such
      Inventions in any and all countries shall continue beyond the termination
      of this Agreement and in such circumstances Employer shall compensate
      Employee, at a reasonable rate and for a reasonable number of hours but in
      no event more than the hours actually spent by Employee, to provide said
      assistance pursuant to a written request by
  Employer.

              


      

       

       

      ARTICLE
5: NON-COMPETE AND NON-SOLICITATION

       

       

      
        	
                5.1

              	
                Employee
      covenants and agrees that (a) during the Term of this Agreement and (b)
      for a period of one (1) year after termination of Employee’s employment
      with Employer for any reason, Employee will not, without prior written
      consent of Employer, directly or indirectly, have an interest in, be
      employed by or be connected with, as an employee, consultant, officer,
      director, partner, member, stockholder or joint venture, any person or
      entity owning, managing controlling or otherwise participating or
      assisting in any business that is in competition with Employer’s business
      or intended business. Notwithstanding the foregoing, Employee’s ownership
      of greater than five (5%) of the issued and outstanding securities of any
      class of a corporation listed on a national securities exchange or
      designated as national market system securities on an inter-dealer
      quotation system by the National Association of Securities Dealer’s, Inc.
      shall not be deemed a violation of this Agreement. Employee agrees that he
      will not interfere with, disrupt or attempt to disrupt the relationship,
      contractual or otherwise, between Employer and any other party including
      but not limited to any investor, banker, broker, agent, customer, client,
      supplier, consultant or employee of Employer. In addition Employee agrees
      that (a) upon termination and a for a period of one (1) year thereafter,
      Employee will not solicit, assist any other party in the solicitation of
      or hire any person employed by Employer at any time during such one (1)
      year period. The foregoing restriction shall not apply to any employee or
      former employee of Employer whose employment with the Employer terminated
      after the date which is one year prior to the date of the termination of
      the Employee.

              


      

       

      
        	
                5.2

              	
                It
      is the desire and the intent of the parties that the provisions of Section
      5 shall been forced to the fullest extent possible under the laws and
      public policies applied in each jurisdiction in which enforcement is
      sought. Accordingly, if any particular portion of Section 5 shall be
      adjudicated to be invalid or unenforceable, the invalid or unenforceable
      portion of Section 5 shall be deemed amended or deleted, if necessary,
      preserving the provision to the fullest extent possible in accordance with
      the intent of the parties, thereby rendering the invalid or unenforceable
      section to be valid and enforceable, such amendment or deletion to apply
      only with respect to the operation of Section 5 in the particular
      jurisdiction in which such adjudication is made. Nothing in Section 5
      shall reduce or abrogate the Employees obligations under the other
      provisions of this Agreement including but not limited to Section 4
      hereof.

              


      

       

      
        
          
             


          

          
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      ARTICLE 6: MISCELLANEOUS:

       

      
        	
                6.1

              	
                Except
      as otherwise provided in Section 4.4 hereof, for purposes of this
      Agreement, the terms "affiliate" or "affiliated" means an entity who
      directly, or indirectly through one or more intermediaries, controls, is
      controlled by, or is under common control with Employer or in which
      Employer has a 5% or more equity
interest.

              


      

       

      
        	
                6.2

              	
                For
      purpose of this Agreement, notices and all other communications provided
      for herein shall be in writing and delivered in person or deposited,
      certified or registered, return receipt requested and postage prepaid in
      the United States or deposited with an internationally- reputable air
      courier with written verification of
receipt:

              


      

      
         

        If to
Employer, to: Dais Analytic
Corporation at 11552 Prosperous Drive, Odessa, Florida 33556, to the
attention of the General Counsel, with a copy simultaneously sent by facsimile
to the attention of Chief Executive Officer at 727-375-8485
(facsimile).

         

        If to
Employee, to________[intentionally omitted]_____________________, or at such
other address as either party may from time to time designate by notice
hereunder.

         

        Notices
shall be effective upon delivery in person or, if mailed or deposited with an
internationally reputable air courier on the earlier of the day following
receipt or midnight on the fourth business day following the date of said
mailing or deposit.

      

       

      
        	
                6.3

              	
                This
      Agreement shall be governed by and construed and enforced, in all respects
      in Accordance with the law of the State of Florida without regard to
      principles of conflicts of law.

              


      

       

      
        	
                6.4

              	
                No
      failure by either party hereto at any time to give notice of any breach by
      the other party of or to require compliance with, any condition or
      provision of this Agreement shall be deemed a waiver of similar or
      dissimilar provisions or conditions at the same or at any prior or
      subsequent time.

              


      

       

      
        	
                6.5

              	
                It
      is a desire and intent of the parties that the terms, provisions,
      covenants, and remedies contained in this Agreement shall be enforceable
      to the fullest extent permitted by law. If any such term, provision,
      covenant, or remedy of this Agreement or the application thereof to any
      person, association, or entity or circumstances shall, to any extent, be
      construed to be invalid or unenforceable in whole or in part, then such
      term, provision, covenant, or remedy shall be construed in a manner so as
      to permit its enforceability under the applicable law to the fullest
      extent permitted by law. In any case, the remaining provisions of this
      Agreement or the application thereof to any person, association, or entity
      or circumstances other than those to which they have been held invalid or
      unenforceable, shall remain in full force and
  effect.

              


      

       

      
        	
                6.6

              	
                It
      is the mutual intention of the parties to have any dispute concerning this
      Agreement resolved out of court. Accordingly, the parties agree that any
      such dispute shall, as the sole and exclusive remedy, be submitted for
      resolution to arbitration in a proper venue in Washington, DC as agreed by
      both parties by a single arbitrator pursuant to the rules of the American
      Arbitration Association and the arbitration award shall be final and
      binding upon the parties and enforceable in any court of competent
      jurisdiction. The cost of the arbitration shall be borne equally by the
      parties.  Notwithstanding the foregoing the parties agree that
      Employer, on its own behalf and on behalf of any of the Employer Entities,
      shall be entitled to seek a restraining order or injunction in any court
      of competent jurisdiction to prevent any breach or the continuation of any
      breach of the provisions of Article 4 and/or Article
  5.

              


      

       

       

      
        
          
             


          

          
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                6.7

              	
                This
      Agreement shall be binding upon and inure to the benefit of Employer, to
      the extent herein provided, and any other person, association, or entity
      which may hereafter acquire or succeed to all or substantially all of the
      business or assets of Employer by any means whether direct or indirect, by
      purchase, merger, consolidation, or otherwise. Employee's right and
      obligations under this Agreement are personal and such rights, benefits,
      and obligations of Employee shall not be voluntarily or involuntarily
      assigned, alienated, or transferred, whether by operation of law or
      otherwise, without the prior written consent of Employer, other than in
      the case of death or incompetence of
Employee.

              


      

       

      
        	
                6.8

              	
                This
      Agreement supercedes and replaces any previous agreements and discussions
      pertaining to the subject matter covered herein.  This
      Agreement, constitutes the entire agreement of the parties with regard to
      the terms of Employee’s employment, termination of employment and
      severance benefits, and contains all of the covenants, promises,
      representations, warranties, and agreements between the parties with
      respect to such matters. Each party to this Agreement acknowledges that no
      that no agreement, statement, or promise relating to the employment of
      Employee by Employer that is not contained in this Agreement shall be
      valid or binding.  Any modification of this Agreement will be
      effective only if it is in writing and signed by each party whose rights
      hereunder are affected thereby, provided that any such modification must
      be authorized or approved by the Board of Directors of Employer or, if
      delegated by the Board to the Compensation Committee, the Compensation
      Committee or its delegate, as
appropriate.

              


      

       

      
        	
                6.9

              	
                Employee
      represents and warrants that the execution, delivery and performance of
      this Agreement does not and will not contravene, conflict with or
      otherwise violate the terms of any written or oral agreement among
      Employee and one or more third
parties.

              


      

       

      
        	
                6.10

              	
                The
      section headings used herein are for convenience and reference only and
      are not intended to define, limit or describe the scope or intent If any
      provision of this agreement. When used in this Agreement, the term
      “including” shall mean without limitation by reason of enumeration. Words
      used in the singular shall include the
plural.

              


      

       

      
        	
                6.11

              	
                The
      failure of either party to insist, in any one or more instances, upon
      strict performance of any of the terms or conditions of this Agreement
      shall not be construed as a waiver or a relinquishment of any right
      granted hereunder or of the future performance of any such term, covenant
      or condition, but the obligations of either party with respect thereto
      shall continue in full force and
effect.

              


      

       

       

       

      IN
WITNESS WHEREOF, Employer and Employee have duly executed this Agreement in
multiple originals to be effective on the Effective Date.

       

      
        
          	
                  DAIS
      ANALYTIC CORPORATION

                	 	 	
                  EMPLOYEE

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  /s/Timothy
      N. Tangredi  

                	 	 	
                  /s/William
      J. Newman 

                	 
	
                  
                    Timothy
      N. Tangredi

                  

                	 	 	
                  
                    William
      J. Newman

                  

                	 
	
                  Chief
      Executive Officer

                	 	 	
                   

                	 


        

      

       

      

 

      
        
          
          

        

        
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